India’s New Defence Blacklisting Policy To Suffer Further Delays

The long-awaited defence blacklisting policy that is aimed at eliminating the provision of blanket bans, and is meant to check the culture of kickbacks brought in by foreign defence firms, is likely to suffer further delays, Hindu Business Line reported on Sunday (20 November). The daily quoted an unnamed source at the Ministry of Defence, who stated that final provisions of the policy are still being vetted and the policy may be released by the end of this month or early next month.

The Defence Acquisition Council, chaired by Defence Minister Manohar Parrikar, had finalised the policy on 7 November, following which it was announced that the policy will be released officially within a few days.

The practice of imposing a blanket ban has not worked to India’s advantage. From ammunition to guns, there is a long list of items that could not be procured in time, or at all, from the best available sources because of allegations of transgression against the manufacturer.

The latest victim of the blanket ban is the Indian Navy’s conventional submarine INS Kalvari, which was to be equipped with Black Shark torpedoes manufactured by Italian firm Whitehead Alenia Sistemi Subacquei (WASS). There are no known allegations against WASS, but Finmeccanica group of which WASS is a subsidiary, has come under the scanner in Augusta Westland chopper bribery scandal. Since then, a blanket ban imposed on Finmeccanica group has left INS Kalvari vulnerable.

“The new policy must be comprehensive enough to ensure that no loose ends are left to be tied at the time of implementation. For instance, it is almost certain that only the offending company, and not the entire group of companies to which it belongs, will face the consequences of transgression under the new policy,” Amit Cowshish, Distinguished Fellow, Indian Institute for Defence Studies and Analyses (IDSA), notes in his report.

The focus of the new policy, as experts have suggested, will be on graded blacklisting and fines. This means that if a defence supplier is found guilty of a wrongdoing in the procurement of a particular military platform, it will be banned for a specific number of years from dealing in that particular segment